Andre K. Fowlkes: Recognize bias and move forward

Back in 2000, two very smart men published an influential analysis with a challenging title.

Their goal: To explain how people get so overconfident in often extremely wrong judgments.

The two authors were Kenneth Fisher, chairman, CEO and founder of Fisher Investments, and Meir Statman, a finance professor at Santa Clara University.

Their paper, titled "Cognitive Biases in Market Forecasts," looked at how people end up exaggerating the reliability of their predictions.

Among the causes is something called confirmation bias — when people, as Fisher and Statman point out, "focus on information that is consistent with their beliefs while neglecting inconsistent information."

In other words, people become so certain that they know the right answers they overlook other information that might challenge their deeply held views.

If you live in Memphis, you recognize the phenomenon.

Here, we are experts at holding on to the things we know while refusing to open our minds to other real possibilities — from government to schools to economic development to social issues.

Just think about the argument about consolidating local governments: two opposing sides were locked into their beliefs about the tax situation in the event of a merger. Some claimed local taxes would double; others claimed residents would see a definite reduction in the local tax burden. Both sides found data to support their views and confirmed it in their arguments.

Economically speaking, there are those who are steadfast in their belief that the correct way to produce jobs is by recruiting big industry. There are others who think that we have to home-grow our jobs through deliberate emphasis on startup companies. We confirm these efforts so hard in our minds that we forget to figure out where the synergy lies as we fight over resources.

In such a socially divided city we still have issues of confirmation bias in how we judge race. For many people, just one bad experience — one act of discrimination, one instance of bad behavior — confirms a stereotype and everybody pays the price.

The problem is the data that we are confirming these biases on: for many, it is the wrong pool of data, for others it is a personal experience, and for others it is not comprehensive.

The sad thing is, even when we have been found to be wrong by being shown that we are confirming incorrectly, we're unable to break this tendency that has been built up for most of our lives. If much of the city acts the same way, it can be crippling. A city whose people believe only what they want to believe doesn't prosper and grow.

Memphis isn't unique in this — all communities have been hobbled by backward thinking.

The key question is, what can we do about it?

Here's one example. Let's look at the economic piece and question of recruiting big companies versus starting new ones.

The massive Electrolux deal and the hundreds of factory jobs it's bringing is a major coup for the city, but is it the magic bullet that'll save the city? Of course not.

Does it create opportunity? Yes.

How sustainable is the opportunity? This depends on the value proposition of the company and how it is reinventing itself to outpace the shrinking industry that it is in.

What is the intervention that differentiates the company so that its workforce does not become outdated? A possible solution is the clustering of startup and small businesses that can feed off this larger company.

Are there new technologies that can be created in Memphis that can help propel Electrolux or create companies that feed off its presence? Of course.

Bottom line: We need to recognize our tendency to have confirmation bias; acknowledge that our theories and philosophies may, at some point, prove wrong; and remain open to opposing data and new solutions.

This recognition, and then action for inclusion, will move Memphis forward.